A letter that a financial giant mailed in early April to Gov. Jim Justice’s Lewisburg home address could hardly be construed as everything being fine in the neighborhood.
The letter represented JPMorgan Chase’s position that companies owned by Justice’s family, including The Greenbrier Hotel, were subject to multiple loan defaults dating back several years, that the default applied to terms negotiated as recently as 2023 and that the lender was in no mood to forgive. From the opening sentences, the tone indicated JPMorgan Chase believed the Justices should have been aware of the mounting set of circumstances.
Right before signing off with “Very truly yours,” the management director for JPMorgan Chase used banking terminology to say the Justice businesses had run out of chances.
“By giving the notice contained herein, you should not in any way anticipate that any other notice not expressly required under the Loan Documents and the Sixth Amended Forbearance Agreement shall be given in the future,” the bank representative wrote.
That was a warning shot in what developed into a big blast last week. JPMorgan, in the intervening weeks, sold the deed of trust on The Greenbrier — along with related loan documents — to a credit collection company, McCormick 101.
The next bang was set off by McCormick 101 last week when a legal advertisement placed in the West Virginia Daily News in Lewisburg letting the world know The Greenbrier would be set for auction on the county courthouse steps later this month, with cash from the highest bidder as the ask.
About the same time, lawyers representing McCormick 101 were filing a lawsuit against Gov. Justice, The Greenbrier and additional Justice-owned entities over a debt of a little more than $40 million. An accompanying filing lays out a claim of breach of commercial contract and asks for the court to intervene.
The lawsuit was filed last month in the Supreme Court of New York for the County of New York, the venue because that’s where the financial agreements were shaped. The default letter sent from JPMorgan to Justice at his Lewisburg home is available as an exhibit among the filings in support of the lawsuit. The Charleston Gazette-Mail was the first to report on the lawsuit’s existence.
The lawsuit and the forced auction are intertwined.
The two proceedings, one in New York and one in West Virginia, likely are intended to work together to reduce opportunities for the Justice businesses to stop the proceedings in West Virginia. If the Justice businesses want to dispute the basis for the declared breach of the agreements, then their lawyers probably will have to go to Manhattan. Also, the creditor suing the Justice family likely wants a deficiency judgment from the New York court if the foreclosure sale in West Virginia does not bring enough money to satisfy its obligation to McCormick 101.
‘Let me be clear that the Greenbrier will not be sold’
Justice, at one point considered West Virginia’s only billionaire, built his political brand on his business acumen — and a major factor in that has been his reputation since he bought The Greenbrier out of bankruptcy in spring 2009.
The two-term governor is now a Republican nominee for U.S. Senate and is considered the front-runner because of his broad name identification and West Virginia’s recent voting trends. He is aiming to succeed Sen. Joe Manchin, an independent who still caucuses with Democrats, in an evenly divided chamber.
When Justice has been asked about the financial conflicts of his family’s expansive business network, he has pushed back, saying he is not directly involved in the family businesses any more and that situations that seem dire at first may be worked out ultimately. He made such statements June 26 and July 11, following up broadly on July 25.
The governor punctuated an administration news briefing last month by referring to recurring questions about the financial situations as “fake news.” “If it gets to the point in time when things are totally absurd and totally ridiculous, fake news stuff and everything, and it just goes on and on, won’t stop and everything, then we’ve got to go in a different direction,” he said. “But I’ll be fair as a human being can be.”
A statement released for the Justice companies after the auction of The Greenbrier was announced cast doubt on whether that will occur and blamed JPMorgan Chase. That statement included comments attributed to Bob Wolford, a Michigan attorney, on behalf of the Justices: “Let me be clear that the Greenbrier will not be sold, and the Justice family will take all necessary action to ensure that there will not be any adverse impact on their ownership of the Greenbrier or the Greenbrier’s operations and the ability of the Greenbrier to continue to provide world class service for its guests will be uninterrupted.”
The deed of trust in the Greenbrier Resort financial dispute was originally recorded in 2014 with JPMorgan Chase Bank as the lender. It was originally recorded securing a promissory note made by James C. Justice II, the borrower and now the governor. The note that it secured was for $142 million.
The statement released by the Justice family described a long standing personal banking relationship with JPMorgan Chase dating back decades. As part of that relationship, the statement indicated, the governor had pledged a second lien position in the Greenbrier Resort behind Carter Bank & Trust to obtain better banking terms from JPMorgan Chase. Over the past several years, the statement said, the governor has paid down his debt to JPMorgan substantially.
That statement said the governor and JPMorgan had been working in good faith under a mutual agreement since 2021 and under that agreement the governor’s debt to JPMorgan has been reduced to $9.4 million. Performance and payments to JPMorgan have even been made as recently as the end of June, according to the Justice statement.
On July 1, the statement said, the governor was summarily notified in writing by JPMorgan that, despite the existence of a mutual agreement to resolve the outstanding obligations, the financial company had sold its loan to Beltway Capital. After purchasing the loan, the statement indicated, Beltway immediately declared the loan to be in default and initiated suit against the governor and certain of his companies and commenced foreclosure proceedings against the Greenbrier.
The statement from the Justices blamed politics for the conflict, tying the bank’s actions to Justice’s run for U.S. Senate.
“This deceitful move by JPMorgan is nothing more than the latest political stunt by the Democrats to undermine the next Republican Senator from West Virginia,” the Justice companies stated.
‘Justice failed to repay the loan in full’
The $40 million complaint filed against the Justices contends the motive is money. The filing lays out a history of the $142 million loan agreement being struck with JPMorgan Chase in 2014 and indicates it was updated several times over the decade, including an agreement from Dec. 29, 2023, giving the Justice businesses the ability to pause or reduce their loan payments. Such a forbearance agreement can help borrowers who are experiencing financial difficulties.
The lawsuit contends the Justice companies defaulted on the terms several times, including multiple instances in 2018 and by failing to meet terms under the 2023 forbearance agreement. Finally, the lawsuit contends the Justices failed to pay the loan in full this past June 28, the maturity date.
Bottom line, the lawsuit contends, “Justice failed to repay the loan in full.” McCormick is asking for what remains of the loan, which its lawyers calculate to be $24 million in principal and $16 million in interest.
“Based on the foregoing,” the lawsuit states, “Plaintiff is entitled to a money judgment against Defendants James C. Justice II, James C. Justice Companies Inc., Justice Holdings LLC, GSR LLC, Wintergreen Partners Inc. and Greenbrier Hotel Corporation, jointly and severally, in the amount of Forty Million Two Hundred Seventy-Four Thousand One Hundred Eighty and 44/100 Dollars ($40,274,180.44) as of July 15, 2024 under the Loan Documents plus attorneys’ fees and costs.”
On July 31, a process server mailed copies of the complaint and exhibits in an envelope marked “Personal & Confidential” to Justice’s home address.
